Trump Urges “Buy Stocks Now,” Powell Warns of Uncertainty, and a New UK-US Trade Deal Framework Emerges

#Trump #Powell #UK-US

Remember Trump’s “legendary move” on April 9? That’s right — on April 9, 2025, Trump posted on X: “This Is a Great Time To Buy!!! DJT”. Immediately afterward, U.S. stocks surged across the board, reversing the slump that had persisted since the tariff war began.

Now, Trump is back. On May 8 local time, he stated that if a trade agreement combined with tax cuts proves effective, “you better go out and buy stocks now.” Following his remarks, all three major U.S. stock indices rallied. By the close, the Dow rose 0.62% to 41,368.45 points, the S&P 500 climbed 0.58% to 5,663.94, and the Nasdaq jumped 1.07% to 17,928.14.

Indeed, Trump has been the focus of much attention lately. Here are the highlights:

Trump urged that if a trade deal and tax cuts can work together, “you better go out and buy stocks now.”
He criticized Fed Chair Jerome Powell, calling him “Big Late Powell” and complaining that “the whole world is cutting rates — except him.”
Trump issued a stern warning to Mattel, threatening a 100% tariff if the company shifts production overseas, causing Mattel’s stock to plunge by as much as 5.3%.
He announced that the U.S. and U.K. have reached a high-profile framework for a trade agreement.

In response, Federal Reserve Chair Jerome Powell held a press conference, where he stated:

The federal funds rate would remain unchanged at 4.25%–4.5%.
The Fed is not in a rush to act and may opt to cut rates or stay on hold depending on future data.
The President’s comments calling for rate cuts “will not influence our work in any way.”

Both Trump and Powell’s statements signal key policy directions and have had significant impacts on the markets — especially the new UK-US trade framework. Let’s break them down.

“You Better Go Out and Buy Stocks Now”: Trump’s Confidence Game Was No Surprise

This is Trump’s second public call for citizens to buy U.S. stocks. While his political motives are beyond the scope of our analysis, one may recall that during his first term, his favorite bragging point was: “Stock markets hit all-time highs under my watch!” Perhaps this is another attempt to fulfill that “legacy.”

Behind this call, Trump is playing two familiar cards:

Tax reform: Continuing his “tax cuts for growth” mantra, encouraging repatriation of corporate capital;
Trade agreement: This time it’s a free trade framework between the U.S. and the U.K. — a move to regroup allied resources amid ongoing U.S.-China trade tensions.

The effect was immediate: all three major indices closed higher. Many are now asking: is it time to jump on the bandwagon?

But caution is warranted — rallies driven by emotion tend to be volatile. Whether this is worth chasing is something investors must assess for themselves.

Behind “Big Late Powell”: A Subtle Signal on Interest Rates

In addition to cheerleading, Trump took a swipe at Powell, dubbing him “Big Late Powell” for “lagging behind while the whole world is cutting rates.”

Crude as the words may be, Powell indeed kept rates steady this time. The Fed maintained the 4.25%–4.5% range, and Powell’s statements were particularly noteworthy:

No explicit inclination toward rate hikes; instead, he used ambiguous language like “might cut or stay on hold in the future.”
Stressed “high uncertainty”, revealing a cautious policy stance;
Explicitly stated: “We will not let the President’s words influence our judgment.”

In plain terms, the Fed is wary of inflation’s persistence, but also recognizes slowing economic momentum. Given softer job data and a choppy CPI, this “wait-and-see” approach essentially keeps the door open for rate cuts.

How did the markets react? A rate-cut wave is unlikely in the short term, but mid-term policy is clearly loosening. This was reflected in the bond market — U.S. Treasury yields declined, signaling investors are beginning to price in more easing.

Mattel Controversy and the Tariff Stick: Trump’s “Made in America” Crusade

Another market stir came from Trump’s hardline comments on Mattel. He warned that if Mattel moved its production abroad, it would face a 100% punitive tariff.

The news triggered an immediate reaction — Mattel’s stock dropped by over 5.3%. This is classic Trump-style protectionism: wielding tariff threats to force companies to stay domestic.

While seemingly targeting one firm, the underlying message is broader: the return of Trump’s “economic nationalism.” He seeks to deter capital flight and strengthen domestic strategies in manufacturing, consumer goods, and raw materials.

However, such moves raise serious questions:

Could this undermine corporate confidence?
Will this reignite global trade tensions?

These issues remain unresolved. The market is still evaluating the marginal impact.

UK-US Trade Deal Framework: A Critical Post-Brexit Puzzle Piece

Now to the main event — a new trade framework between the U.S. and the U.K.

According to preliminary White House disclosures, the deal will cover agriculture, automobiles, digital services, financial services, and more. It’s touted as “one of the most strategically important agreements between the U.S. and the U.K. post-Brexit.”

Here’s why the agreement matters:

Geopolitical: Strengthens the Atlantic alliance by reinforcing U.K.-U.S. cooperation outside of the EU;
Economic: Addresses long-standing gaps in U.S.-U.K. trade rules, especially around cross-border investments, data flows, and financial licensing;
Market response: The British pound rose briefly after the news, and U.K. bank stocks rallied — indicating a positive market view.

That said, it’s only a framework at this stage. Many implementation hurdles remain. Still, directionally, it’s a constructive development — especially in a world increasingly fragmented by regional trade blocs.

Market Response: Stocks Optimistic, Bonds Cautiously Watching

Overall, the market reaction over the past two days can be summarized as follows:

Equities: Driven largely by sentiment, fueled by Trump’s comments and tax-cut expectations;
Bonds: Beginning to price in a potential rate cut later this year;
USD: Rose briefly but showed choppy movement, reflecting FX markets’ effort to balance policy shifts against inflation/growth risks;
Commodities: Oil prices rebounded slightly, based on modestly improved global growth outlooks.

Conclusion

The key takeaway: don’t focus solely on headline rhetoric — look deeper into the policy signals behind them.

Trump’s rallying cry may boost confidence, but whether he can deliver on tax cuts and the new trade deal depends on coordination with Congress, the U.K. Parliament, and market realities. Meanwhile, Powell’s outwardly steady tone hides subtle signs of easing — investors should watch the June or July FOMC meetings for clearer direction.

Lastly, while the UK-US framework is a bilateral win, it’s also a reminder that global trade is splintering into regional blocs — a shift that may define the next phase of globalization.

In short: The market is once again being driven by policy expectations, not fundamental changes.